Oregon Employment Law Update 2018
Part One

Equal Pay
Oregon’s existing equal pay law prohibits paying workers of the opposite sex unequally. Beginning on January 1, 2019, the law expands to encompass all members of a protected class (race, color, religion, sex, sexual orientation, national origin, marital status, veteran status, disability, and age). It will be unlawful to:

• Discriminate in compensation for work of comparable character based on an employee’s membership in a protected class.
• Compensate an employee more than is paid to employees of a protected class for work of comparable character.

However, employers may compensate workers unequally based on seniority, merit, production, workplace location, travel, education, training, or experience. Also, compensatory and punitive damages will be disallowed against an employer who, within the three years before a civil action was filed, completed an analysis of the employer’s pay practices and took steps to eliminate any wage differentials.

Pay History
Employers will want to strike questions about prior compensation when interviewing prospective employees. Employers or prospective employers can no longer seek the salary history of an applicant or employee. Oregon’s Bureau of Labor and Industry (BOLI) may enforce this law starting on January 1, 2019, and individuals may file a civil suit starting on January 1, 2024.

Can You Compete with Your Boss?

You decide to own your own business.
But, you are still employed.
Duties in your current job include finding businesses to buy.
You find one.
You buy it for yourself.
It’s in the same industry as your current employment.
Boss sues you.

These facts were heard in a jury trial this week. We represented the employee…and prevailed. Generally, you cannot compete with your boss. However, there are lessons to be learned–for both employer and employee–in our successful defense of our client.

Following is a synopsis of the employer’s legal claims and our arguments to defeat each of them.

Breach of Noncompetition AgreementWe convinced opposing counsel to withdraw the breach of noncompetition agreement claim before submitting it to the jury for consideration. Oregon has strict rules for noncompetition agreements to be enforced. For example, notice that a noncompetition agreement is required must be given two weeks before employment, or the agreement must be signed as part of a promotion. Also, the employee’s compensation must exceed the median income of a four-person family.

Breach of Fiduciary DutyAn employee owes a fiduciary duty of loyalty to his employer. Competing with one’s own boss usually breaches that duty. We successfully sidestepped this claim by arguing that the employee was merely taking steps to compete. Courts have held that an employee may compete with his boss after employment and, during employment, may take steps to compete.

Intentional Interference with Prospective Economic RelationsFor this claim, the employer had to show that our client interfered with a prospective business opportunity through improper means or for an improper purpose. The employer argued that our client undercut him. He claimed that our client bought the business without his knowledge or consent after learning of his offer. The employer testified that he already had a “handshake” deal. We convinced the jury that the employer was only willing to make a low-bid offer and that our client negotiated after their potential deal was dead.

Unjust EnrichmentUnjust enrichment occurs when a person confers a benefit, the recipient is aware of the benefit, and it would be unjust to allow the recipient to retain the benefit. The employer argued that he conferred a benefit when the employee learned of the business opportunity through his employment and that it would be unjust to allow the employee to keep the business. Unjust enrichment is considered an equitable remedy, basically meaning that it taps into that gut feeling of whether a person’s conduct is right or wrong. Most likely, the jury was influenced by the inconsistencies we exposed in the employer’s testimony as well as his defensive and aggressive behavior we prompted on the stand.

As with all jury trials, the outcome is never certain. Every trial ends with that moment of silence when the jury reenters the courtroom with its verdict. The lead juror is called forward and hands the verdict form to the judge. Finally, the judge reads aloud a decision having significant ramifications for the anxiously awaiting parties. While good lawyering helps, knowing possible claims and defenses before a dispute even begins can directly influence the result.

The Wild West of Yamhill County

Recently, I drove past the vineyards and antique shops for a trial in Yamhill County. The dispute was over land ownership and involved the legal theory of adverse possession. I represented a young couple who found themselves fighting to hold onto the very land they had purchased. A developer, through his corporation, claimed that he had acquired part of their land through adverse possession. When threatening to burn down their house, firing his shotgun, and running them down with his truck did not work, he filed suit to have his claims legally recognized.

Adverse possession allows one to acquire land without purchasing it, even if a recorded deed is in another’s name. One has to prove that the adverse use of the land is actual, open and notorious, exclusive, hostile, and continuous–for a 10-year period. As of 1990, Oregon added the requirement that one has to prove an honest, objective, and reasonable belief of actual ownership of the land.

Opposing counsel argued that a long-standing fence running through my clients’ property should be the new property line. At trial, we were able to shoot holes in his claims. We showed that the fence was not intended as a boundary, that prior owners of my clients’ property regularly drove on the property outside of the fence, and that an ongoing feud over the property line negated any reasonable belief of ownership. We prevailed on all claims and convinced the judge to order the removal of an encroaching garage from the disputed property.

To protect against an adverse possession claim, you should periodically use the land, erect a fence or other barrier on the boundary, or otherwise provide notice that the land belongs to you. And if there is a duel, please do not hesitate to call if you need a gunslinger (though no gun here, just legal arguments).

Texting Can Get You 20 Years in Prison.

This month, a Massachusetts Court found that text messages sent by a young woman to her boyfriend caused his death and constituted involuntary manslaughter. He threatened suicide and filled his truck with carbon monoxide. The woman encouraged him through her texts and, when he said he was scared and left his truck, she told him to “get back in.” Her sentencing hearing is scheduled for August 3rd, and she will be facing up to 20 years in prison.

Last April, 10 students received letters from Harvard revoking their admission because of their posts in a Facebook messaging group.

Many still view electronic and social media communications as strictly for entertainment purposes. However, it is becoming our new form of communication. Letters and faxes are becoming obsolete. Those that resist will be left behind in both business and social circles.

In our civil ligation practice, many of our cases are decided upon the flippant texts, emails, and postings that we uncover. Such communications make excellent evidence. They usually identify the sender and date sent.

So, before you click “send,” make sure that you stand behind whatever you are saying and appreciate the ramifications as well as the permanent record that you are likely creating.

Burned by Starbucks?

(No, we are not talking about the taste.)

A woman in Florida was awarded $100,000 this week after her Venti Pike Place coffee spilled on her while visiting a Starbucks drive-thru. The case is reminiscent of the nearly $3 million award by a New Mexico jury against McDonald’s in 1992 for spilled drive-thru coffee.

So, you are thinking of frequenting drive-thru coffee merchants instead of playing Keno? In Oregon, to prevail on a claim of negligence you would have to prove, among other elements, that the coffee merchant’s conduct was unreasonable in light of the risk of you getting burned. Handing you coffee in a drive-thru does not seem unreasonable. Arguably, handing you coffee with a loose lid may be considered such. You would also need to show that the negligent conduct caused you harm. In both the Florida and New Mexico cases, the spilled coffee caused first and second degree burns, resulting in permanent scarring.

Many coffee merchants are regulating the heat of their coffee to ensure that it will not cause burns. Perhaps, some will also install cameras to defend against claims of customers that might be loosening the lids of their morning java.

Whether you are brewing or buying the coffee, contact Acker + Associates for any legal questions or assistance.

Raising Rent or Evicting Tenants? Careful!

Last month, the Oregon House passed legislation that would lift Oregon’s statewide ban on rent control and restrict landlords’ ability to evict tenants. House Bill 2004 provides that, after 6 months, landlords may only terminate a month-to-month tenancy for cause. Exceptions are allowed, but landlords must still provide a 90-day notice. The Senate has yet to vote on the bill.

Meanwhile, Portland has already enacted a local ordinance to circumvent the ban on rent control. A landlord that raises rent over 10% within a 12-month period may have to pay up to $4,500 in “tenant relocation assistance.” Any raise in rent over 5% requires a 90-day notice with specified language.

Rent control is coming…or already here. Failure to comply with the new legislation could prove costly. Contact Acker + Associates for any needed assistance.

Update on Trump’s Travel Ban

What Happened Yesterday?
Yesterday afternoon, the Ninth Circuit Court of Appeals heard oral argument on whether to uphold the suspension of the ban. The ban was suspended by the temporary restraining order (TRO) entered by Judge James Robart of the U.S. District Court for the Eastern District of Washington. The three-judge appellate panel asked questions but did not render a decision.

What is Being Decided?
The issue is not whether the ban is constitutional but whether or not Judge Robart abused his discretion in granting the TRO. Typically, TROs are not appealable. They last for 14 days unless the court makes them permanent during the pending case by issuing a preliminary injunction, usually after a hearing. The Department of Justice (DOJ) is arguing that Judge Robart’s TRO resembles a preliminary injunction and is appealable. The judges will likely decide whether to overrule the TRO and reinstate the travel ban or punt the case back to District Court for the preliminary injunction hearing.

Highlights
Although not as thrilling as the Patriot’s Super Bowl comeback, the hearing had some sparks.

• DOJ lawyer August Flentje was mostly on the defense. Judge Friedland asked if the government introduced any evidence of terrorist threats to justify the President’s actions. Flentje responded, “these proceedings had been moving very fast.”

• Judge Canby asked Washington State lawyer Noah Purcell what irreparable harm the state of Washington will suffer if the travel ban is reinstated. Purcell responded that the burden is on the DOJ to show irreparable harm and then cited the negative impact on schools and hospitals.

• Judge Canby tried to get Purcell to acknowledge that the travel ban only impacted a small percentage of Muslims, suggesting that it is not discriminatory. Purcell responded that he had not done the math but Trump’s comments demonstrate the intent to discriminate.

• Judge Canby asked Flentje whether Trump has the authority to impose a ban on all Muslims entering the country. Flentje avoided the question and remarked, “I’m not sure I’m convincing the Court.” He proposed a middle ground–a stay that applies to only foreign nationals who have not been to the United States.

Next
The decision of the Ninth Circuit should be announced before the end of this week. I predict that the appeals judges will reject the DOJ’s motion and the matter will return to Judge Robart for a preliminary injunction hearing to determine if the suspension of the ban will continue. Regardless, the losing side will likely appeal to the Supreme Court to rule on the constitutionality of the ban.

Trump’s Comments
Trump referred to the Judge Robart as a “so-called judge” and his decision as “ridiculous.”

In response to yesterday’s hearing, Trump suggested that the Court of Appeals is biased and political. He insisted that his order is within his executive powers and even “a bad high school student would understand this.”

Trump’s personal attacks on the judiciary are puzzling and counter to the usual decorum, at least for those of us that have appeared before the Ninth Circuit Court of Appeals. I recall a judge stating that he could not hear an attorney because the attorney was not wearing a suit and tie. I remember another judge stating that the courtroom is his living room and that those present will conduct themselves accordingly. Even Trump’s Supreme Court nominee, Neil Gorsuch, said today that Trump’s remarks about the judiciary are “demoralizing” and “disheartening.”

This last weekend, I traveled to Montana to join my buddy, Governor Steve Bullock, in celebrating his election to a second term as a Democrat. This was a significant victory in a state where 55.6% voted for Trump as opposed to 35.4% for Clinton. I have yet to meet anyone in Montana that does not love Governor Bullock. The woman next to me on the plane spoke highly of him and his interest in their education system. The owner of a bar I visited told me how the governor helped their hospitality industry and bought me a drink when I told him I am a friend of the governor. If only someone like Governor Bullock could take the helm of our country…

Challenges to President Trump’s Travel Ban:

What Is Being Banned and Is It Legal?

On Friday, President Trump signed an executive order that bars nationals from seven Muslim-majority countries (Iraq, Syria, Iran, Libya, Somalia, Sudan, and Yemen) from entering the United States, bans refugees from entering from any country for four months, and bans refugees from Syria indefinitely. It also suspends the Visa Interview Waiver Program–which had allowed nonimmigrant visa seekers to forego an in-person interview–and requires a review of nonimmigrant visa reciprocity agreements with other countries.

Trump relies on the executive powers of the Immigration and Nationality Act (INA). The INA allows the President to suspend entry of aliens or a class of aliens if the President finds such entry to be detrimental to the interests of the United States. (The seven countries were first identified by Obama in 2015 when he imposed travel restrictions under the INA.)

Discrimination
While the INA is broad, it also prohibits discriminating in the issuance of an immigrant visa because of a person’s nationality, place of birth, or place of residence. Arguably, Trump is violating all three. In addition, U.S. and international law prohibit deportation of non-citizens who will likely face torture or persecution if returned home.

Religion
If the ban is viewed as targeting Muslims, it arguably violates the First Amendment freedom of religion clause. However, nowhere in the order does it reference religion. A successful challenge on such grounds would likely require proving the intent behind the order. The order singles out countries with Muslim majorities. Also, in his campaign rhetoric, Trump declared his intent to limit, if not bar, Muslims from entering the United States.

Due Process
Arguably, those detained in U.S. airports are being denied procedural due process. By being placed on an airplane and sent back to one of the seven countries, they are being denied a hearing. Courts usually balance the interests of the individual and the government in deciding such due process challenges.

What’s Next
At least five courts have already granted temporary relief against the order. (However, many government agents have defied the courts as they continue to detain and deport individuals.) Despite the backlash from members of Congress, Trump has defiantly stood by his order. Ultimately, our judicial branch will need to decide upon the constitutionality of the order. Despite the seemingly egregious unconstitutionality of the order, courts tend to defer to the President on immigration issues that involve national sovereignty and foreign relations.